ET Now: What is the sense really? What are you advising clients because there is a lot of traction that we are seeing. May be the index does not move too much, but everyday there are individual components which are making quite a bit of a meaningful move, especially in the broader markets. Are you advising buying right now or are you circumspect right now after the rally that we have seen already?

Rajen Shah: We were a bit cautious and a bit bearish on the market till Wednesday actually. But when we got the statements from the Prime Minister, who is now handling the finance portfolio, that reversed the climate of pessimism and revived the animal spirit in the economy. The statements from the PM made the complete change of sentiment and that has made us bullish on the market. We believe that the message which the Prime Minister is giving is that some aggression could come in the form of some strong reforms, may be FDI in aviation, FDI in insurance or FDI in retail.

So, some developments on that front may happen in the coming weeks because such serious statements change the whole sentiment, the whole mood of the market and that has precisely what has happened because on Thursday we saw the market was stable and on Friday we saw a very sharp move. On Monday, Tuesday and Wednesday it was holding on actually.

Looking at the way things are happening and the monsoon also expected to pick up, I think we could probably go up to 17900-18000 levels in the coming weeks. So we have changed our views on the market. We are positive on the market and we believe there is a lot of value in the broader market. Investors can see the kind of developments which are happening in United Phosphorus, between September 2011 and March 2012, the management bought 51 lakh shares from the market at an average price of 130.

The stock came down, the management announced a buyback. They have already bought back 50 lakh shares at an average price of 120 over the last one month. Everyday they have been filing disclosures with the BSE and the NSE saying that they have bought one lakh shares, three lakh shares, five lakh shares. This clearly tells that there is a lot of value in the market.

Indian Hotels was at 55. Tata Sons subscribed to about 4-4.5 crore shares at a price of 103 when the stock price was at 55. What is this all saying? There is a lot of value in the broader market. Reliance has bought three crore shares at an average of Rs 700-Rs 710. When companies are buying back shares, it gives you a clear indication that the companies' management has got immense confidence not only in the company, but also in its future prospects. There is a lot of value in the broader market and we need to stay invested.

ET Now: You were talking about aviation and retail. What are the recommendations that you have for those sectors?

Rajen Shah: I would not be buying at this point of time. I was just talking about reforms, FDI in aviation, FDI in retail, FDI in insurance. This actually triggers the positive sentiment in the market, which is already building up, and this momentum can take the markets to 18000. In the insurance space, there are plenty of opportunities even now. Aditya Birla Nuvo is quoting at about Rs 800, Max India at about Rs 192, Bajaj Finserv is at about Rs 700. Insurance is at that point where telecom was 12 years back and after we saw the subscriber addition and the way the telecom industry flourished and way the market cap of Bharti, RComm at that point of time moved up. So insurance can actually generate fabulous return over the next 4, 5, 10 years after seeing the number of people insured in India vis-a-vis the world average.

It is very low actually. So this space is going to move up very fast in the coming years and that is where we need to look at. Look at Aditya Birla Nuvo and when Aditya Birla Nuvo about two months back was quoting at Rs 900, Kumar Mangalam Birla himself had taken about 1.65 crore warrants. When the management is pumping in Rs 1500 crore in this company, we should not be scared of buying the stock at Rs 810. There are, thus, plenty of such opportunities, as I mentioned earlier.

ET Now: From the financial space, what is it that you are betting on? While we have spoken about some commodity-related themes at large between private banks, public banks and also some NBFCs, where are you placing your bets?